Virtus Seix Floating Rate High Income Fund Class C (SFRCX)

Overview

The fund described primarily focuses on investment strategies involving senior floating rate loans and other floating rate debt instruments. It positions itself as an investment vehicle that prioritizes first and second-lien senior loans, making these its main assets. With a strong emphasis on floating rate instruments, the fund aims to offer investors exposure to debt that could potentially benefit from rising interest rates. Moreover, the fund has a notable strategy for diversification, including the condition that up to 20% of its total assets may be allocated towards senior loans made to non-U.S. borrowers. However, it maintains a cautious approach towards currency risk by limiting the share of its portfolio in non-U.S. dollar denominated loans to a maximum of 5%.

Products and Services

• First- and Second-Lien Senior Floating Rate Loans

  This product focuses on providing investors with the opportunity to invest in senior secured loans that have floating or variable interest rates. These loans are usually secured against the assets of the borrower, providing a level of protection against default. First-lien loans have priority over other debt in case of a borrower's insolvency, whereas second-lien loans are subordinate to first liens but still offer a higher claim than unsecured debt.

• Other Floating Rate Debt Instruments

  In addition to senior floating rate loans, the fund invests in a variety of other floating rate debt instruments. These may include but are not limited to, variable rate bonds, asset-backed securities, and other forms of debt that exhibit floating interest rate characteristics. This diversification helps spread risk and capitalize on different segments of the floating rate market.

• Investment in Non-U.S. Borrowers

  Recognizing the potential for global diversification, the fund allocates up to 20% of its total assets to senior loans made to non-U.S. borrowers. This opens the door to international markets and allows investors to gain exposure to foreign economies and companies. However, to manage the risk associated with currency fluctuations, the fund is conservative with its exposure to non-U.S. dollar denominated loans, capping it at 5% of the portfolio's total loans.